New Delhi, Nov 9 (Agency) Union Finance Minister Nirmala Sitharaman has approved the final sovereign green bonds framework of India, an official statement said on Wednesday. The approval will further strengthen India’s commitment towards its Nationally Determined Contribution (NDCs) targets, adopted under the Paris Agreement, and help in attracting global and domestic investments in eligible green projects, the statement said. The proceeds generated from issuance of such bonds will be deployed in public sector projects which help in reducing carbon intensity of the economy, it added.
The framework comes close on the footsteps of India’s commitments under “Panchamrit” as elucidated by the Prime Minister Narendra Modi at COP26 at Glasgow in November, 2021. Green bonds are financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects. By virtue of their indication towards environmental sustainability, green bonds command a relatively lower cost of capital vis-à-vis regular bonds and necessitates credibility and commitments associated with the process of raising bonds. CICERO, an independent and Norway-based Second Party Opinion (SPO) provider, was appointed to evaluate India’s green bonds framework and certify alignment of the framework with ICMA’s Green Bond Principles and international best practices. After due deliberation and consideration, CICERO had rated India’s Green Bonds Framework as ‘Medium Green’ with a “Good” governance score, the statement added.